Powerful ideas from top nonfiction
Try Blinkist to get the key ideas from 5,500+ bestselling nonfiction titles and podcasts. Listen or read in just 15 minutes.
Start your free trial
Blink 3 of 8 - The 5 AM Club
by Robin Sharma
Listen to the Intro
Fair Pay Fair Play summary
Robin A. Ferracone
Aligning Executive Performance and Pay
11 mins
Table of Contents
Fair Pay Fair Play
summarized in 5 key ideas
Audio & text in the Blinkist app
Key idea 1 of 5
Executive compensation plans should take into account CEO performance and industry standards.
Imagine you’re an account manager on a team of three employees. Even though you all work equally diligently, you find out that your two colleagues are paid a higher salary than you.
Such a situation would be unfair, right?
Unfair pretty much explains the state of executive compensation today. Executives are routinely overcompensated, and compensation plans seldom take into account CEO performance.
Consider that John Chambers, the CEO of Cisco Systems – one of the world’s biggest telecom companies – each year “earned,” in addition to his $300,000 salary, from $5 million to $6 million worth of stock options and a $400,000 bonus.
That’s way too much money – no executive can perform that well! But performance isn’t all a compensation plan should consider to be fair. It also should reflect what other CEOs earn in the same market.
Industry standards vary, and each industry is subject to different external forces. For instance, the energy sector is sensitive to oil prices, while the tech industry reacts to inventory levels in the IT supply chain.
Such external factors are important, as they can affect the overall performance of any executive. That’s why it’s important for CEO pay to reflect the compensation of peers in the same industry.
This way, if an oil crisis drives prices through the roof, the CEO of an energy firm won’t be blamed for the company’s poor returns. Even if the CEO’s performance was above reproach, it wouldn’t make sense to base the executive’s compensation on that of technology CEOs working in a booming market.
Want to see all full key ideas from Fair Pay Fair Play?
Key ideas in Fair Pay Fair Play
More knowledge in less time
Read or listen
Get the key ideas from nonfiction bestsellers in minutes, not hours.
Find your next read
Get book lists curated by experts and personalized recommendations.
Shortcasts New
We’ve teamed up with podcast creators to bring you key insights from podcasts.
What is Fair Pay Fair Play about?
Fair Pay Fair Play (2010) sets out the basic principles of fair executive compensation. These blinks explain what goes into making compensation reasonable, why executives are often paid disproportionately higher salaries than other employees and which concrete strategies you can employ to set a fair pay scale for your company.
Who should read Fair Pay Fair Play?
- Human relations (HR) professionals
- Entrepreneurs and CEOs
- Anyone interested in the rules of executive compensation
Categories with Fair Pay Fair Play
Books like Fair Pay Fair Play
People ❤️ Blinkist
Sven O.
It's highly addictive to get core insights on personally relevant topics without repetition or triviality. Added to that the apps ability to suggest kindred interests opens up a foundation of knowledge.
Thi Viet Quynh N.
Great app. Good selection of book summaries you can read or listen to while commuting. Instead of scrolling through your social media news feed, this is a much better way to spend your spare time in my opinion.
Jonathan A.
Life changing. The concept of being able to grasp a book's main point in such a short time truly opens multiple opportunities to grow every area of your life at a faster rate.
Renee D.
Great app. Addicting. Perfect for wait times, morning coffee, evening before bed. Extremely well written, thorough, easy to use.
People also liked
Start growing with Blinkist now
26 Million
Downloads on all platforms
4.7 Stars
Average ratings on iOS and Google Play
91%
Of Blinkist members create a better reading habit*
*Based on survey data from Blinkist customers